SUBSCRIPTION BUNDLES

FREE

Real Money

Market News: Fitbit, Ralph Lauren, Oracle Corporation

The stock markets in the United States gained driven investors' optimism regarding the strength of the economy, and the statement of the Federal Reserve that it would raise interest rates at a gradu...

The stock markets in the United States gained driven investors' optimism regarding the strength of the economy, and the statement of the Federal Reserve that it would raise interest rates at a gradual pace. The NASDAQ Index reached a record level today.

Yesterday, Federal Reserve Chairperson Janet Yellen noted that the labor market improved further, and observed an increase in the growth rate of the employment cost index. However, she described the signs of stronger wage growth as hopeful, but tentative. Yellen wants to see more definitive evidence of economic growth.

The Federal Open Markets Committee FOMC said it is appropriate to implement the first increase in interest rates when it sees further improvement in the labor market, and feels confident that the inflation rate will return to its 2% target.

Policy makers have not yet set the schedule for raising interest rates. They will continue to evaluate incoming economic data to determine as to when is the appropriate time for tightening.

Today, the Department of Labor reported that the number of people who applied for unemployment benefits declined by 12,000 to 267,000 for the week ended June 13. The advance seasonally adjusted insured unemployment rate was 1.7% for the week ended June 6.

Commenting on the market trend, Tom Mangan, a money manager at James Investment Research told Bloomberg, "It's a pretty rosy scenario here. The market has discounted a lot of bad things and, in fact, there are some really good things happening. As long as the Fed is dragging their feet in terms of going back to what might be called a normal level of liquidity, then they are providing momentum for the economy."

On the other hand, Robert Sinche, a strategist at Amherst Pierpoint Securities observed a "bit rotation on the equity market." He said, "Equities that were sold because of their foreign exposure may begin to reverse a little bit as we see signs of the dollar's upward momentum breaking."